Nghe An seeks solutions to improve PCI to better serve investors

Reasons for PCI decline

Index, methodologyPCI measures the business environment and economic governance quality of provincial governments.Established by VCCI in 2005, adjusted in 2009, 2013, 2017 and 2021. For a long time, identifying PCI as an important criterion in assessing capacity and business environment, Nghe An has always focused on solutions to support people and businesses, focusing on reforming administrative procedures (TTHC), creating convenience and openness for businesses to implement investment projects.

Provincial leaders inspect production and business in Anh Son. Photo: Pham Bang

In 2019, Nghe An's PCI led the North Central region, ranking 18th nationwide, up 1 place compared to 2018. This is the province's highest position ever, showing progress in administrative reform and investment attraction. By 2021, Nghe An's PCI ranked 30th, down 12 places, in which the transparency and fair competition indexes are still low.

At the scientific workshop "Factors affecting investment attraction of enterprises in Nghe An province" organized by the Ho Chi Minh National Academy of Politics in coordination with the Nghe An Provincial Party Committee, based on the results of PCI announcement, Dr. Dau Huong Nam - Deputy Director of the International Knowledge Sharing Center, Ho Chi Minh National Academy of Politics said that there is still a lack of consistency between policies, will and implementation; consistency in policies from year to year, policy changes have not created peace of mind for enterprises; consistency between superiors and subordinates, labor quality... The above correct opinion is also the assessment of many enterprises on the business environment in Nghe An.

Analyzing the component indexes of PCI in 2021, although it still includes 10 component indexes, in fact, more indicators have been added. Specifically, there are 142 indicators belonging to 10 component indexes with a total score of 100. Notably, out of 10 component indexes, 3 indicators aretransparent business environmentand public business information, business support policies and good labor training policies account for 60 weighted points; other indicators, except for inspection time, examination and implementation of regulations, quick administrative procedures are 10 points, the rest are maintained with only 5 points each.

Workshop on criteria for assessing provincial competitiveness in Nghe An organized by the Department of Science and Technology, NAPC and VCCI in 2021. Photo: Nguyen Hai

From the above assessment method, it can be seen that the PCI assessment index has changed, basically assessing the direct results of the management activities of provincial leaders such as issuing policies and procedures instead of indicators showing the business investment environment as an indirect result of management behavior. In other words, the PCI index in 202 tends to assess the results of the causal relationship of the management activities of provincial government leaders instead of assessing the general results brought about by many stakeholders.

In fact, the three areas in which the top 10 provinces are all high include the labor training index, time costs, business support policies; the attitude of the provincial government towards the private sector, business registration time, and procedures.procedures to get a discount on rent...

For the above new indicators, targets and variables, Nghe An is lower than the average of other countries and far from the group of leading provinces, so the drop in ranking is understandable.

Citizens come to do procedures to issue and renew driver's licenses at the Provincial Public Administration Service Center. Photo: Nguyen Hai

Mr. Tran Quoc Thanh - Director of the Department of Science and Technology shared: With a result of 64.74 points, in 2021, Nghe An's PCI still increased but dropped 12 places because other provinces took drastic measures, while the solutions implemented in Nghe An were not strong enough.

Selecting the index to create a breakthrough?

In recent times, Nghe An has issued preferential policies and investment support; directed the review, monitoring and urging of project progress; assigned provincial leaders to monitor and direct key projects; expanded planning,innovation of land lease policy in Southeast Economic Zone,Cua Lo PortReopen international container routes, support and closely monitor large projects in industrial parks, promote investment attraction policies, vocational training policies, issue decisions to implement the Government's Resolution on improving the business environment...

The Provincial People's Committee holds meetings every two months.Association meeting, business association, entrepreneursto listen to businesses' opinions, to share and resolve difficulties, contributing to creating high consensus...

VSIP Nghe An Industrial Park phase 1 has synchronous infrastructure investment. Photo: NH

After the PCI 2021 was announced, in the spirit of openness, the Provincial People's Committee also assigned the Nghe An Investment, Trade and Tourism Promotion Center (NAPC) to work with VCCI. Based on the research and acceptance of expert opinions, the province will have solutions to create breakthroughs and improve PCI in accordance with the new situation.

According to NAPC leaders, the low PCI in 2021 has objective and subjective reasons. Objectively, the PCI assessment methodology has changed. In fact, Nghe An has a number of new indicators that are highly appreciated and strengths such as online administrative procedures always achieving high rankings, increasing 5 places on the rankings.

VSIP Nghe An Industrial Park phase 1 has synchronous infrastructure investment. Photo: NH

However, Nghe An still has many shortcomings and limitations related to component indicators such as land access and stability in land use, informal costs, fair competition index, dynamism and pioneering of the government... which have been pointed out for a long time but have been slow to improve and are underrated. A few cases involving officials in departments and branches being arrested, the situation of "petty corruption"... have also reduced the confidence of many businesses.

Mr. Phan Thanh Mien - Chairman of the Provincial Small and Medium Enterprises Association frankly expressed: "Private enterprises and small and medium enterprises are the main components of PCI assessment. In recent years, although the province is determined to reform administrative procedures, somewhere in the departments and district levels have not really accompanied enterprises; the way of guiding and handling investment and land access administrative procedures is still cumbersome, so it is very difficult to satisfy investors and enterprises."

From the actual research, NAPC representative shared: In the coming time, besides improving the business environment to be better and more substantial, the province needs to choose a few high-scoring component indexes and Nghe An has strengths to handle to create a breakthrough, specifically good business support policies and labor training policies;land access policy, reduce rental prices in industrial parks/clusters.

Nghe An has a system of vocational training schools and abundant labor resources that are among the top in the country, but businesses, especially FDI enterprises, are still quite concerned about attracting and using the number of people.workers stay in their hometown to work, especially skilled workers.

Workers learn about job positions at the Labor Supply and Demand Connection Fair organized by the Southeast Economic Zone Management Board and VSIP. Photo: Nguyen Hai

On the other hand, along with issuing the Project to support business and entrepreneur development until 2025, the province has also just approved the Process.Assessing the competitiveness index of departments and districts(DCCI).

Since 2020, the province has issued policies to support start-up innovation and support businesses in digital transformation. Currently, after conducting the DCCI assessment in 2021, there are still different opinions among departments and branches, so the province has not announced the official results. To change and create a breakthrough, it is thought that the province needs to research and soon publicize this assessment index.

Nghe An Provincial People's Committee organized a meeting and dialogue with enterprises importing and exporting container goods through seaports. Photo: Nguyen Hai

In summary, along with a number of measures to rectify and improve public service ethics, Nghe An is determined to create a breakthrough in improving PCI, taking drastic actions to create real changes with high socio-economic results.